I needed to get to Doncaster in Yorkshire and bring over some stuff. So, flying was out. The car ferry to Hollyhead beckoned. Into Dublin port. Two hours on the Swift Catamaran followed by a 4-hour drive. Simple.
Rough Night: It was a particularly rough crossing. I hadn’t been on a boat for about 10 years and had forgotten just what that was like. Not pretty. The entire family sitting beside me, father, mother and two ghostly pale kids were throwing up. The Beatles lyrics “On the way the paper bag was on my knee” kept coming into my mind (I know they were singing about an airplane – but I’m trying to keep your attention here).
Talk to Strangers: I moved seats and began to engage with the guy opposite. Anything to block out the vision of people stumbling across a slippy deck, making their way to the even slippier toilets. Turns out that my new best friend was in the wedding dress business. On his way to Harrogate, the exhibition capital of England. His jeep was packed to the gills with dresses for brides, bridesmaids and flower girls along with all sorts of wedding and exhibition paraphernalia. Now, I can’t speak for anyone else, but if I ever appear on Mastermind, wedding dresses will not be my specialist topic. He told me a couple of interesting facts.
Price: Perhaps not overly surprising, there are different markets. He was selling stuff in the mid-range and was under ferocious price pressure. Dresses made in China, which sold wholesale for €1200 in 2007, were now selling for €500. A central point made was that no wedding dresses are currently manufactured in Ireland – with the exception of some really top end haute couture stuff.
Clothing Factories: In Ireland the clothing factories have disappeared. Garment manufacturing has become a thing of the past along with the myriad of ancillary services that ran alongside this. Today, it would be easier to find a Polar Bear in Ireland than a sewing machine mechanic. When I grew up, about half of the girls who left school in Cabra got jobs in sewing factories. The equivalent jobs just don’t exist anymore.
Overpaid Printers: By coincidence I had been working on a project for a large printing company – an industry that has followed a very similar trajectory. During the Celtic Tiger era, wage rates had risen to the point where it was no longer economically viable to print materials in Ireland. The company became uncompetitive. But when the Tiger died, the trade union mantra: ‘What we have, we hold’ made it almost impossible to get people to accept pay cuts. Like lemmings, the staff were adamant about maintaining current wage rates and insisted on running headlong towards the unemployment cliff. The contradiction in this can be stated as follows: ‘I will not accept a 10% wage cut – so I will hold out until I take a 60% wage cut by becoming unemployed’. Go figure! The clothing and printing industry stories outlined above are interchangeable and a swathe of manufacturing has disappeared from Ireland.
Competitive Island: In order for Ireland to remain a compelling investment location, a number of elements need to be in place. Three, in particular, are central:
1. USP: We have to be able to market something unique (it may not be one single thing, but a small combination of areas in which we excel). International capital is mobile and we need a lure. Current thinking on this is wooly – despite all the talk about developing a smart economy.
2. Infrastructure: We have to have the infrastructure to attract capital e.g. physical, transport and taxation. Great progress has been made on this in recent years (i.e. we now have a road system which is worthy of a developed economy).
3. Education: We need an educated workforce to develop high added-value products and services. You can’t have a smart economy without a smart workforce. And, because of high wage rates we can no longer compete on price. This area of re-skilling needs targeted investment in the education system (the corollary is that we need high productivity from the education sector to justify this; it is not an argument for just pumping money in to make life easy for people who work in that space).
All three conditions are needed to ensure success – otherwise ‘Ireland Inc’ will struggle to swim in the world economy – assuming that we don’t want to solely become a nation of pubs and Riverdance knock offs. In this particular instance small is beautiful. With a tiny workforce (by international standards) we need to understand our key strengths and develop our niche on the world stage. That was the central message from the Farmleigh initiative and it still holds good. International parallels prove that it can be done.
Singapore Model: I lived in Singapore for a couple of years. It’s a small island, nestling just below the southern tip of the Malay Peninsula. Singapore is roughly the same size as Achill Island with one key difference. Almost 5 million people live there. In the early 60’s their President decided that, in the absence of any natural resources, the country would have to find a basis to compete internationally. It has since become the 4th most important financial centre in the world.
A very similar challenge is posed for Ireland today. What is the economy going to look like in 10 or 15 years time? This is the central question we expect our politicians (who can tap into the best intellectual resources in the country) to wrestle with. So what if Brian Cowan or any other politician wants to stay late at the bar? It’s a forgivable, venial sin. But what’s unforgivable is the refusal to wrestle with the conundrum presented – figuring out how to differentiate the country. Because understanding and delivering strategy lies at the very core of leadership. As Max De Pree reminded us: “We cannot become what we need to be by remaining what we are.”
My informant on the car ferry told me that some Irish brides are now buying dresses directly from China on the net for about €100. Even if the dress doesn’t turn out great, at that price it’s probably worth a punt. So, the next time you decide to get married, spare a thought for that seamstress in China who is getting paid €160 a month. Closer to home, out-thinking the competition is the only way to keep the Irish economy afloat. Because strategy is not about generating options, it’s about making choices.
Paul Mooney PhD.
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